Increasing Choice for Rail Passengers

Debate between Lord Johnson of Marylebone and John Redwood

Wednesday 11th July 2018 Westminster Hall

[Joseph Johnson]

To some extent but not entirely— I think that is the answer to my hon. Friend’s question. An integrated ticketing system enables people to buy a ticket for any journey anywhere in the country; it does not necessarily enable them to buy a ticket that is fungible across operators.

My hon. Friend also mentioned the east coast main line, where there are no fewer than 11 passenger operators, including the two open access operators, Hull Trains and Grand Central, which have delivered huge benefits for the communities they serve. Alternatively, take the west coast main line, where Great North Western Railway has recently been granted rights to run open access services between London and Blackpool alongside the franchised operator. That will offer passengers a choice of operators and up to six extra direct services to Blackpool per day, on top of the franchised services already available to them.

My hon. Friend the Member for Henley (John Howell) mentioned the new east coast railway. It is right that we consider all options for that new railway, which is under development, so that we deliver the best outcome for passengers and taxpayers, but we must also deliver all types of service, which a free market on its own would not do. So unless they can make a profit, franchises can get this balance right for everyone.

I am clear that open access is an important part of the railway, and can play a greater role in offering greater choice, in the right circumstances.

[John Redwood]

One day when I was trying to get back from Birmingham to London, I had pre-booked on service A to terminus A and that service was up the spout, so service A very kindly said that I could go on service B—a different company on a different route to a different terminus—and it just honoured the ticket. So there is clearly a way of making these tickets interoperable if the companies wish.

[Joseph Johnson]

My right hon. Friend has made an important observation. We can certainly look at ways to make tickets more fungible, but the purpose of the present integrated smart ticketing system is to enable passengers to “turn up and go”, to use the latest technology and so on. As yet, it has not focused on making tickets fungible between operators, and I am sure that is something that, as the open access policy develops and as open access develops as a feature of our system, will become more prevalent.

As the CMA recommended, however, a greater role for open access requires robust reforms to create a level playing field between different types of operator. At present, as my hon. Friend the Member for Weston-super-Mare knows, open access operators do not pay towards the fixed costs of the network on which they operate, nor do they contribute towards the vital social services that the franchised operators that they compete with deliver. That distorts the incentives of operators and means that we cannot realise the full benefits of competition for passengers.

That is why we are now working closely with the Office of Rail Regulation on its proposals for reforming track access charges in the next rail control period, from 2019 to 2024. These reforms will see open access operators pay an appropriate amount towards the fixed costs of the network where they are able to. We support this move as a vital step in creating the level playing field between open access and franchised operators.

We have also consulted on a possible public service obligation levy. Such a levy would complement track access charging reform, so that open access operators would also pay towards the social services that franchises deliver to many stations. Those stations would not have the levels of service they do today if left entirely to the free market, and the Government offer greater passenger choice through the franchising system to deliver social as well as economic benefits.